This seems remarkably unsupported. I don't think of Europe as being very innovative, despite their impressive social safety net. And I think of Asia as being very innovative and entrepreneurial, despite their lack of much of a safety net. Hmmm...
The reality of a great safety net is that someone has to pay for it. Who is that?
I'm a bit of a die-hard let-the-bozos-starve sort of wack-job libertarian. So, what's a bigger infringement of rights? Take hundreds of billions of dollars from US citizens, and spend it enforcing arbitrary rules on a populace that doesn't have representation or a vote? Or take billions from US citizens and spend it patching up said citizens when they fall down or get sick?
I hate taxes. Really, I do, as much as anyone you'll ever meet. And I hope that the market could someday solve this problem more efficiently. But I also think that killing people is a lot more evil than healing people. I voted for Ron Paul largely because he was the only candidate who said outright that he would shut down all unwanted military bases in his first year.
Dismantle the military empire, and you've got money for medical care. Additionally, adding a base level of safety net could be a disruptive force that allows smaller and more agile companies (ie, in the 1-10 employee range) to get more done with less overhead, which is exactly the sort of thing that needs to happen if stuff like this is going to be solved cleverly.
Come on, we're hackers, right? Think about it. This is a complex problem with a ton of moving parts, and that's kind of what we do, isn't it? So, apply the same maxims that serve you so well in dealing with software:
Measure before you optimize. Solve the big problems first. Patch the in-production product, and THEN design its replacement. The perfect is the enemy of the good.
A bit of a false dichotomy, don't you think? I agree with most of the rest of your post, though I think that the primary effect of increasing the safety net will be moral hazard issues, not people jumping to do a startup now that they have a safety net. People who do startups are incredibly rare, and somehow I doubt that's because of any safety net issues.
Medicare and Medicaid appear to be similar to the systems that most other countries (e.g. Britain, Canada) have in place to pay for healthcare (except that in most other countries everyone is covered). How do you explain that, in those other countries, the per-capita costs of healthcare are lower than in the US?
Most other countries are poorer than the US; the US has a GDP per capita 50% higher than the EU and (for example) 40% higher than France. Since a medical procedure takes the same amount of time in either place, the cost will be proportional to wages.
Additionally, the US is far more unequal than most other countries. At the top of the skill chain, the gap increases significantly [1]. The US costs more simply because doctor's salaries need to be competitive with banker and programmer salaries.
[1] I know a few FOB Indians who had multiple jobs/offers, they say the US can often pay double what the EU does.
I don't recall exactly how Britain and Canada do it, but I'm pretty sure it's not the same way. Here's how it works:
The RBRVS Fee Schedule.[6]Medicare uses the resource-based relative value scale (RBRVS) to pay for physician services. Under this formula, Medicare officials compute the “objective value” of an estimated 7,000 procedures.[7] Each component of a medical service is assigned a weighted value that is calculated by using social science measurements of the time, energy, and effort required to perform a given procedure, including resource inputs such as medical equipment, malpractice insurance, and administrative costs. These weighted “values” are then converted into dollar amounts and used to determine the fees that Medicare pays to physicians for those services.[8] The diagnosis related group (DRG) system reimburses hospitals using a similar strategy.[9]
You've also got, unfortunately, a ton of people that go out of work. Noone will get rid of military programs if it shuts down jobs in their district.
http://en.wikipedia.org/wiki/Health_care_system_in_Japan
So does Korea:
http://www.slideshare.net/manhattanresearch/south-koreas-hea...
And so does Taiwan:
http://en.wikipedia.org/wiki/Healthcare_in_Taiwan
Any other innovative Asian economies you'd like to compare?
Unless you have some kind of condition, is there any situation in which the fear of not having health insurance is actually justifiable? I mean, if you want to avoid paying off a huge hospital bill over time, then ok... but come on, if you're starting a startup, gambling a 0.001% chance (or whatever) that you might have to pay 4-5k off over a few years seems like an insanely good bet.
Also, I heard from a friend (who is very probably wrong about this) that you don't actually have to pay off a hospital bill. It won't count against your credit score. Is this true? I would never do something like that, but... if not paying the bill doesn't count against your credit score, then I can see why people might not pay it.
Apparently, a lot of people do... otherwise the nation wouldn't spend such a large percentage of the GDP on medical care.
Be thankful you're not old, yet.
Your friend is wrong. Google "medical bankruptcy".
Total bill? $1553.
This is a very significant sum for people with regular, consistent income. For someone subsisting on ramen to launch their next great idea, this is crippling.
Also, I highly doubt the credit score thing is true.
Having treatment refused to my children because they are not insured (or not insured enough) is quite frankly terrifying. The system standing between me and medical machines and professionals is damn near random and I find it terrifying. Enough that I've had serious pause when striking out on my own.
Not everyone who starts startups (or other business) is 23 and single.
I got in a car accident in 2000, other driver at fault. Their insurance company agreed to pay the medical bill. I didn't realize until 3 years later, when the collection agency tracked me down, that they never did. That crap finally fell off just a few years ago, but cost me who knows how much in added interest rates over the years.
Not having health insurance is pretty stupid, even if you're healthy, young, broke, and in college. If you're starting a company, it's just completely irresponsible.
Two years later, we were doing about 2 million a year. Still, I poured every penny I had into the company "creating" additional good-paying jobs. Then I had a stroke. Yes, at 27. Because the doctors could not find a "reason" for my stroke, the insurance company paid a grand total of $2700, mostly for the ambulance and the care I received in said ambulance.
I was left with a bill of $67,000. Yes 3 zeros. Because of how long I was in the hospital and recovering, and because my business was based on relationships with my clients, the business faltered, and I eventually shut it down. I am now paying off every cent of what I owed on the business, as well as that $67k in medical bills.
Moral of the story: don't think you're invincible because you're young, or because you don't have a pre-existing condition. Also, I can absolutely assure you that medical debt DOES affect your credit.
Here's the crazy part. I'd do it all again in a heartbeat, and I will.